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Procure wooden pallets through a pallet pooling supplier
MATERIAL PACKING AND HANDLING
Segment Family Class
78
12
0
SDG Alignment
12. Ensure Sustainable Consumption and Production Patterns
SDG Target
12.5
Target Description
By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse
Level of Effort
Level of Effort Scale
2
1 -Quick Wins: solution involves adding criteria for the good or service being purchased (ex: certifications), minimal internal process changes.
2 -Long Term Adoption: solution requires some changes to internal processes and/or more capital investment (ex: digital transformation to reduce paper use).
3 – Disruptive Opportunities: requires significant investment and changes to internal processes (ex: retrofitting building)
Category Assessment
Assessment
• Conduct an internal assessment to determine the pallet requirements:
a) life cycle of pallets in your business by mapping out the purchase, logistics approach, and disposal processes.
b) cost per pallet, including volume of purchases, disposal costs, and investigation pallet usage.
c) pallet supplier contracts and certifications.
d) pallet specifications (such as type of material used, weight, load capacity, % recycled or refurbished, structural design
• Calculate the footprint of your wooden pallets using this EPA certified calculator. (Linked in the resources section)
Opportunity Identification
Business:
The pooling of pallets will work as savings by removing disposal costs, reducing stock-out risk, and optimizing pallets' usage. Additionally, part of the analysis should include optimizing the weight of palettes used for your product load. Consider the procurement of lower weight pallets, as this will translate into a reduction in cost and carbon footprint.
Sustainability:
The use of wooden pallet pooling approach is the most sustainable pallet procurement strategy on a large-scale basis.
Strategy Build & Execution
• Evaluate the market with a Request for Information (RFI) that includes encouraging the current supplier to consider the potential of starting a local pallet pooling system with their customers and your company as the pilot initiative.
• Include a change management strategy in the RFI and take into account the implementation costs.
• Consider the cost and environmental benefits of a local pallet sharing program (decreased transportation costs and order turnover time).
Supplier Negotiation & Contract
• Consider working with a supplier to build their capacity to create this circular economy (pallet pooling system) and leverage this business creation in exchange for a discounted rate.
• Agree on the quality and maintenance accountability and responsibility, quality management, the turnaround time for orders, and the opportunity to sell/receive credits for contributing excess pallets to the system.
• Leverage connections to the market through negotiations by including a clause with a discounted rate or benefit received from marketing the pallet sharing pool to other vendors.
Supplier Performance & Management
• Perform annual Supplier Relationship Review (as supplier relationship is vital for a successful closed-loop system) and required sustainability reporting in yearly reviews.
• Maintain records of turnaround time, pallet quality, purchasing and warehousing cost, average inventory level, and inventory variations.
• Perform an internal review after the change has been implemented to evaluate pooled pallet use's commercial impact and such a pallet pool system's environmental impact.
Resource Links
Carrano, Andres L, Thorn, Brian K, & Woltag, Henry. (2014). Characterizing the carbon footprint of wood pallet logistics. Forest Products Journal, 64(7-8), 232-241.
Anil, Sebastian K, Ma, Junfeng, Kremer, Gül E, Ray, Charles David, & Shahidi, Shirin M. (2020). Life cycle assessment comparison of wooden and plastic pallets in the grocery industry. Journal of Industrial Ecology, 24(4), 871-886.
Bengtsson, Jonas, & Logie, James. (2015). Life Cycle Assessment of One-way and Pooled Pallet Alternatives. Procedia CIRP, 29, 414-419.)
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